Covalent modification of core histone proteins within chromatin has emerged as an important gene regulatory mechanism in eukaryotes. Acetylation is the best characterized, but recent research indicates that phosphorylation, methylation and ubiquitylation also turn genes on and off. The modification enzymes are generally components of large, multisubunit complexes that are modular in structure and function, exemplified by the paradigmatic acetylation complex SAGA in S. cerevisiae. Our recent research has uncovered several novel characteristics of SAGA function. At certain promoters phosphorylation of histone H3 promotes SAGA-dependent acetylation, resulting in a specific histone modification pattern. In addition, SAGA is comprised of components suggestive of novel functions. One subunit is a ubiquitin hydrolase, Ubp8, which removes ubiquitin from H2B. Loss of Ubp8 lowers transcription of certain SAGA-regulated genes. A second component is Sin3, previously known to be a component of complexes containing histone deacetyltransferases. The overall goal of the proposed research is to explore the function of SAGA and SAGA-related complexes in gene activation and gene repression. Our hypothesis is that SAGA harbors specific functions related both to activation and repression, and that SAGA-mediated histone acetylation intersects with other histone modifications in a pathway leading to specific patterns of modifications that represent the activated promoter. Our specific goals in the proposed research are, first, to explore modification patterns in the histone H3 tail in vitro and in vivo. Our data suggests that there are multiple modifications present on the H3 tail at the GAL1 promoter, including phosphorylation, acetylation, methylation and ubiquitylation. In vivo and in vitro methods will be used to determine the sequence and pattern of modifications and their function in effector protein binding. Second, we will determine the role of the ubiquitin hydrolase Ubp8 in SAGA. We have established that Ubp8 targets H2B for deubiquitylation and that Ubp8 is critical for transcription of SAGA-regulated genes, GAL1 and SUC2. We will determine whether H2B is a specific substrate of Ubp8 at these promoters and whether ubiquitin hydrolase activity is the key function of Ubp8 in transcription. Third, we will determine the role of Sin3 association with Gcn5. Our data indicates that the portion of SAGA that contains Sin3 (SAWSR) contains reduced or absent Spt20, Spt3 and Tra1, which are important coactivator proteins within SAGA. We will test the hypothesis that SAWSR functions in transcriptional repression in association with previously known Sin3-interacting repressors. Histone acetyltranferases have been shown to be essential for mammalian development, and been associated with human disease, including chromosomal translocations that result in cancer. These findings underscore the fundamental nature of chromatin regulatory processes and point to the importance of further studies of their basic mechanisms.